Posted on: August 23, 2023, 06:55h.
Last updated on: August 23, 2023, 06:55h.
When COVID-19 hit, casinos everywhere felt the force of it, but governments stepped in to help. Spain was no exception, and a new report shows that, for gaming properties in the autonomous community of Galicia, that help resulted in millions of dollars in relief.
Galicia's government, then under the control of President Alberto Núñez Feijóo, decided at the end of 2020 that it would lower taxes on some gambling companies in 2021 to “mitigate the effects” of the pandemic. At the time, it forecasted that the measure would mean losing around €3.66 million (US$3.98 million) in income for the year.
But now the official government numbers-crunchers have confirmed that the impact was much greater. In total, the gambling properties avoided paying €5.36 million (US$5.82 million) in taxes.
Government Loses as the House Wins
The official argument used by the government to introduce the tax reduction for casinos and bingo and slot operations was that it was a necessary evil. It said that it was the best way to counter the effects of the pandemic in 2020.
The government quantified the fiscal impact at €3.66 million, a figure it included in a specific report sent to Galicia's Parliament as part of a study commission for the reform of regional financing. In that same report, as it demonstrated a reduction in gaming tax revenue, the government also requested that parliamentarians greenlight a measure to give it more money.
This summer, the Board of Auditors, Galicia's official government accountants, published its annual report on the numbers from 2021. Through this report, the comptroller determined the real losses incurred by the government from its tax breaks.
More losses are likely, too, as Spain's gaming revenue rebounds. Although the government argued for the tax in 2021 to mitigate the impact of COVID-19, in 2022, it reformulated the measure and maintained the bonus for gaming machines in bars and other venues.
This year, even though Feijóo left office a year ago, it tweaked it once again to add bingo operators. In doing so, it argued that bingo is in sharp decline and about to disappear.
Galicia Embraces Gambling
Galicia has been working on new gambling laws for the past five years and is finally making progress. The new Galician Gambling Law will update the 1985 laws, and is finally ready for its final approval in the Parliament of Galicia.
Among other issues, the new rules will allow gambling machines to remain in bars after opponents failed to drum up enough support to get them banned. The reform also allows for bigger casinos and will provide for additional oversight of bingo operations, even if they're “about to disappear.”
One of the most contentious measures of the gambling reform centers on the location of gaming properties. While there had been a push to force any existing facilities to move away from educational centers, creating a minimum barrier of 300 meters (984 feet), the measure failed. However, Galicia won't approve new properties that don't meet the requirement.
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